SHARES in engineer May Gurney soared yesterday as it found itself at the centre of a bidding war, after construction group Kier said it was considering an offer for the firm.
Kier’s potential bid comes hot on the heels of Costain’s announcement earlier this week that it was seeking a £178m merger with the Aim-listed construction company.
Kier said that a tie-up with May Gurney – which maintains highways, railways and utility services – would “create significant value for shareholders, establishing a market-leading and well-balanced business”.
The enlarged group would offer Kier an opportunity to expand its footprint in the regulated sector, the FTSE 250 company said yesterday, as well as offering an “unrivalled range of services to local authorities”.
Kier has made previous attempts to discuss a merger with May Gurney, and in light of the Costain move yesterday said it was “considering its options” for the “good quality support services business”.
Analysts from Whitman Howard yesterday said that Kier was a better fit with May Gurney, due to its local authority and small maintenance project experience.
JP Morgan Cazenove and Numis Securities are acting as financial adviser and broker to Kier, while Canaccord Genuity is advising May Gurney. Rothschild is advising Costain.
May Gurney shares closed up 35.5 per cent at 250p yesterday.